Sunday, February 03, 2013

How to win arguments by pretending to be a simpleton

Michael Shedlock has a guide on "How to debate Paul Krugman". He endorses the approach of "Austrian" economist Hans Hermann-Hoppe, which is, in a nutshell, "Relentlessly pretend to be an ignorant simpleton." If you think I'm kidding, see what Shedlock and Hermann-Hoppe have to say:

"It is very important in replies to people like Paul Krugman, that we don't get involved in technical details. Ask some questions almost like a child. Explain to me how increases in paper pieces can possibly make a society richer. If that were the case, explain to me why is there still poverty in the world? Isn't every central bank in the world capable of printing as much paper as they want? I am sure the guy cannot answer this type of question. Nobody can answer this type of question. We always get bogged down in technical details of his argument instead of always repeating this question: Please explain to me how a piece of paper can make society richer."

Would that work?

Krugman would respond with incomprehensible gibberish "for wonks only" as well as typical Keynesian nonsense about how paying people to dig holes and other people to fill them up would start a chain reaction of growth.

A child would see the answer was preposterous, but not a trained economist, politician, or brainwashed academic. Paul Krugman, keynesian economists in general, politicians wanting a free lunch, and most academics are all incurable.

Nonetheless, Hans Hermann-Hoppe's answer is indeed the correct one. By asking questions a child will understand, some non-brainwashed people will see Keynesian and Monetary stimulus for what they really are: economic stupidity.

Actually, feigning stupidity is often an effective tactic in an argument, especially when your opponent is interested in explaining an actual idea, and you're mainly interested in making your opponent angry. I've used the tactic once or twice myself, in fact, back in my college dorm days, to frustrate and exasperate a comparative literature major (frustrating Comp Lit majors being a social good in and of itself). The discussions would go like this:Comp Lit major: "Noah, you are not going to solve the Problem of Agency in one night!" Noah: "OK OK, let's think concretely about this. What about an insurance agency?"

Comp Lit major: "ARGH, you are just not getting this at all!" (storms out of the room)I never did find out what the Problem of Agency was...

Anyway, Hans Hermann-Hoppe thinks Paul Krugman is the Comp Lit major - a serious, sober, do-gooding nerd type - and all he has to do to score a win is make Krugman mad. Actually, it's probably more than that; he probably thinks that because the audience for these debates is (in his mind) mostly ignorant simpletons, that if he acts like an ignorant simpleton, he will resonate with the audience - he will seem to them to be one of their tribe - and Krugman will seem like an alien outsider, with his equations and his thought experiments and his other nerdy nerd stuff. "Go home and play with your slide rule, nerd! We Cool Guys know that printing little pieces of paper can never make a country richer! High five!"

However, "Triple H" (as Hans Hermann-Hoppe will henceforth be heralded) makes a slight mistake. He's using a trolling technique that is optimized for dorm-room BS-ing sessions, not for the modern media. The world of the modern media is slightly different; it tends to be written down, which changes the playing field in several ways. For example, it allows greater use of counter-trolling techniques, optimized for putting foolishness on the spot. Consider the following analogues to Triple H's argument:"Explain how you can possibly cure diseases by eating little capsules filled with mold. If this were the case, couldn't we all be perfectly healthy just by letting our fruit sit in a closet for a week before we eat it?""Explain how you can possibly float just by heating up the air in a balloon. If this were the case, couldn't our tea kettles levitate?""Explain how you can possibly stay healthy by washing your hands with water. If this were the case, wouldn't people who drank out of rivers never get sick?"Explain how you can possibly generate energy by touching two chunks of metal together. If this were the case, couldn't we power the world with a steel welding plant?"

...and so on. (Inserting a "Durr hurr!" at the end of each such example is optional.)

We then find this remarkable fact...society by using money will go from the non-optimal...configuration to the optimal...configuration...[T]he use of money itself can be regarded as a kind of social compact...Perhaps the function of money...is to change [its] value as to create [the] optimal pattern of lifetime savings."

And I can also observe that this paper is incredible famous, and I can ask Triple H (and Michael Shedlock): Why don't you know this paper?

And I can also observe that this paper is very mathematically easy, and I can ask Triple H and Michael Shedlock: Why can't you do some simple algebra?

...See what I did there?

Or if I want, I can link Triple H and Shedlock to Paul Krugman's parable of the baby-sitting co-op, a simple explanation of a second way in which printing paper money can create real wealth. And I can ask Triple H and Shedlock: Hey guys, why can't you understand that simple example? It would only take you an hour - three hours, if you're not too bright - and understanding it could make a huge difference in the performance of your financial portfolios.

In the modern media, see, people have a little more time to read over the arguments, and think about them, than in a college dorm. Not a lot more, but a little more. (They are also considerably less stoned. I hope.) This little bit of extra time and thought allows us, after listening to Triple H and Michael Shedlock, to say: "Wait...Simply refusing to exert the mental effort to understand Krugman does not constitute a rebuttal of Krugman. 'I am dumb, therefore you are wrong' is actually a pretty silly thing to say."

Because you should always remember: On the internet, for every caricature, there is an equal and opposite caricature. Troll at your own risk.

Their answer, by the way, is the real balance effect--prices and wages adjust so that any quantity of pieces of paper provide all of the benefits you describe. Icreasing the number of pieces of paper add nothing.

(Of course, the changes in the quantity of money avoid the need to adjust all the prices and wages and contracts. But they would respond that changes in the quantity of money lead to distortionary injection effects that are avoided if all prices and wages are adjusted consistent with both necessay changes in relative prices and providing the needed real balance effect at the same time. Since this is what they really believe, the "simpleton" approach is bad faith on their part.)

Noah, may I ask why you even pay attention to the Auburn Austrians of the LvM Institute? (at least WRT monetary issues; on other topics, they may have interesting things to say) If you want to criticize the Austrians, why not take a look at serious work such as Larry White and George Selgin's work on Free Banking?

Please answer one thing for me: In intl trade textbooks, the starting point of analysis is a free trade system (even though perfectly free trade has never existed since the days of the caveman). So why is it that when we analyze banking and money, we automatically assume that a central bank is necessary? Why not at least examine why a purely market-based monetary and banking system is flawed?

(Free market money isn't just a "theory" either; Canada's system of privately issued banknotes, w/o a central bank, had ZERO bank failures during the Great Depression).

A thoughtful post by Selgin: "Fedophilia"http://www.freebanking.org/?s=fedophilia

1. The Bank of Canada was started in 1934, so they weren't without a Central Bank for the whole depression. It also begs the question, why did they start one then?

2. Lack of bank failures is a bit of a cherry-picked metric. They still had major deflation and depression issues. The counter-factual should be, could they have been better off with a Central Bank earlier on?

3. Canada was still very much under the wing of the UK in many ways.

4. The real question isn't so much about central banks, but about fiat money vs. a gold standard. Canada dropped the gold standard in 1933.

Granted, the premise of the question is good! We're all so used to central banks these days. It's interesting to think about life without them (and how truly necessary they are). I side in favor of them, but

1. This is a good question. Selgin touches on it here (at 48:47) http://www.youtube.com/watch?v=JeIljifA8Ls

According to him, it was a political sop to populist inflationary pressures in Western Canada. The journal article he mentions, by Bordo and Redish, reaches the same conclusion (I haven't yet read it, though I would like to). From the abstract, it says the creation of the BoC was "a response to political rather than purely economic pressures." http://www.jstor.org/discover/10.2307/2122238?uid=3739616&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21101760147367

2. Again, good point. Yet, defenders of central banking also often cite this metric as evidence of the need for central banking and/or deposit insurance (i.e. contrasting the bank failures of the 1930s to the almost total lack of failures in the postwar period until the S&L crisis of the 80s).

Re: Canadian deflation--I can't vouch for the accuracy of these particular stats, but according to Selgin's talk (linked above) the Canadian stock of money only declined by 14% (vs. 34% in the US). Canada certainly suffered economically during the Depression, but considering that its major trading partners (the UK and the US) were also depressed, it would have been remarkable for an export-dependent economy like Canada not to suffer.

There are many counter-factuals to consider. One is: would the US banking system have done better during the Depression w/o restrictions on branch banking? Here's a paper that concludes that the US banking system would have been stronger had the restrictions on branching not existed: http://www.econ.yale.edu/seminars/echist/eh03/mitchener-033103.pdf

Another counter-factual to consider is: if the US had avoided persistent currency panics in the latter 19th century, as Canada did, would the Fed have ever been created at all? Politically, the panics (and esp. the Panic of 1907) were potent ammunition for the forces agitating for the creation of a US central bank.

Had the US not adopted central banking, who knows how the present conventional wisdom re: the need for lender of last resort, too big to fail, etc. might have turned out.

3. This is an interesting point. Specifically, can you tell me some ways in which the banking system of Canada was influenced by the UK? (It's alright if you don't know specifics, any hints or leads would be appreciated).

I think this point may apply more to Australia's depression of the 1890s, which is arguably the biggest failure of a Free Banking system. I think the Barings Crisis of 1890 may be partly responsible for the sudden contraction of British investment in Australia. I need to learn more about the Australian economy and its dependence on UK investment.

4. I'm not so sure that this is the fundamental question. One problem is that there were so many different types of gold standards. Canada had a Free Banking system that used gold as "inside" or "base money" (to settle inter-bank clearings), while most other countries had gold standards managed by central banks.

This is a complicated point, but basically, I think the issues of Free vs. Central Banking and Fiat Money vs. Gold Standard are separate and need to be treated as such. However, I know of no Free Banking system that evolved into a pure fiat system w/o the establishment of a central bank first.

Don't know much about 1837 in particular, but I assume you're alluding to the numerous 19th century financial panics in the US as counter-evidence against Free Banking. Please refer to the post below on the weaknesses of the US system: http://noahpinionblog.blogspot.com/2013/02/how-to-win-arguments-by-pretending-to.html?showComment=1359991178651#c4231613181952883506

Even the worst banking examples during this era--the mass failures of the "wildcat" banks in the Midwest (Illinois, Michigan, Wisconsin, and Ohio)--did not cause these state banking systems to collapse. Furthermore, some states such as New York saw the rapid evolution of stable free banking systems in the decades prior to the Civil War. Other states would most likely have followed suit if had it not been for the National Banking Acts (which taxed private banknotes out of circulation).

I also like free banking, though I doubt it would stop panics or crashes. But a data point to consider: back in the days before the 1913 creation of the US Fed., the GDP per capita in the late 19th century was, in the USA and most other Western Europe countries, about the same as in the late 20th century (data: Angus Maddison). So essentially a central bank is irrelevant. Booms and busts are not the issue: the issue is: area under the curve of said booms and busts. A Dirac delta function has infinite 'boom and bust' and yet a nice constant finite area under the curve--so a bunch of these booms and busts side by side could mean prosperity, and it would mean the economy is constantly adjusting in a good way (Austrians claim busts are good--unlike Keynesians--as they flush out the deadwood in an economy).

Hans-Herman Hoppe in this instance is acting as a great advert for ignoring modern Austrian school economics. He doesn't sound like he knows or understands what Krugman's actual position is. How the Austrian school has fallen since days of Menger... Embarrassing.

I don't agree with Paul Krugman, but it's fairly easy for him to demonstrate empirically the idea that printing money can technically increase economic activity. From a point of theory, he would refer to the baby sitting co-op. From an empirical standpoint he will refer to research by Eichengreen and Sachs on the Great Depression.

This is why the questions to ask Krugman in order to debate him and win are ones that accept his prior that printing money can sometimes technically increase economic activity, but look at other problems that may arise — things like ponzi finance, zombie industries, financialisation, moral hazard etc.

Krugman has addressed Schumpeter's creative destruction argument in the past, but I can refer to a lot of empirical evidence to show that these are significant issues (e.g. Japan's zombie financial system, the very many US financial firms still engaging in similar practices to those that led to the crash of 2008, research by the BoE that shows QE enriches the top 5% much more than anyone else).

I'm pretty confident Krugman would hold to his position that injecting liquidity to support the system is still a good thing (although I think ultimately this assertion is unfalsifiable) but I don't think he would be able to deny that there are serious and severe side issues with his policy preference.

Hoppe's argument just makes Hoppe look like he is arguing with a caricature, and would yield nothing but laughter from Krugman.

I think Krugman makes two mistakes when criticizing the Austrian position. #1: He casually dismisses the "unsustainable boom" part of the Austrian Business Cycle Theory (ABCT) as equivalent to "the phlogiston theory of fire.” #2: He believes that the Austrian solution to financial crises is to do nothing. Some Austrians (namely Rothbardians like Hoppe) do take this position, but the Free Banking Austrians (White, Horwitz, and Selgin) do not (I will briefly elaborate below).

Re #1: Eichengreen is not so quick to discount the Austrian diagnosis. While he doesn't wholeheartedly endorse it, he writes:

"The credit boom that spanned the first eight years of the twenty-first century was unprecedented in US history... That many of the projects thereby financed, notably in residential and commercial real estate, were less than sound became painfully evident with the crash. All this is just as the Austrian School would have predicted."

Re #2: Free Banking Austrians who have incorporated Leland Yeager's Monetary Disequilibrium Theory insights believe that relying exclusively on downward wage-price adjustments after financial crises is indeed too painful. The question is whether a pure free market banking system would be able to supply the emergency liquidity needed or if injections from a central bank are necessary. By examining a "natural experiment" of the 19th century (the Canadian and US banking systems), Free Bankers conclude that a central bank is NOT necessary.

Krugman, Eichengreen, and nearly all monetary economists cite the US 19th century banking crises as evidence in favor of having a central bank. However, Canada, with its system of privately issued banknotes, avoided such crises entirely. Why?

The difference was two key restrictions on US banks: 1) Prohibitions on bank branching; 2) Requirements that, prior to issuing banknotes, banks had to first buy a slightly larger amount of state (and after the Civil War, fed. govt) debt (ex: to issue $90 of currency, a bank first had to buy $100 worth of state bonds).

Restrictions on branching caused banks to be overexposed to regional economic fluctuations. It also caused banks in the interior to be totally reliant on NY "correspondent banks" for access to the NY money market. Naturally, this created more fragility in the system (esp. during panics).

The limitation on issuing currency also was a direct cause of the currency shortages of the 19th century. Banks should have been allowed to lower their reserve ratios and issue currency w/o restriction in times of exceptionally high demand for banknotes (such as during harvest season, when workers needed to be paid). The govt debt purchase requirement needlessly tied currency issuance to the govt bond market (and also caused banks to accumulate too many state bonds, which often later turned into junk).

Selgin explains this much better than I can here (from 10:50): http://www.youtube.com/watch?v=JeIljifA8Ls

What about the recent financial crisis? Given that we have a central bank and don't have a Free Banking system, Free Banking Austrians did support some of the liquidity provisions, as well as the assertion from the Market Monetarist, NGDP targeting school that money was too tight after the crash. Selgin makes a useful analogy:

"A man is rescued from drowning, his lungs full of water. He is revived, but then given nothing to drink. Must we say of such a man either that he is suffering from having taken in too much water, or that he is suffering from taking in too little? Can we not say that he has suffered first from one thing and then from the other?

Similarly, is it not possible for one to suggest that there was too much credit expansion in the U.S. from 1924 to 1928, and too little afterwards, or that there was too much from 2003-2006 and too little afterwards? I wonder why so many critics of the Austrian theory have insisted on treating those like myself who suggest it may capture some aspect of the recent cycle as also denying that the post 2007 contraction of nominal spending was anything but a desirable “corrective” response to previous malinvestment?"

Re: "Japan's zombie financial system, the very many US financial firms still engaging in similar practices"

This is a huge simplification, but aren't these essentially undesirable outcomes of the too big to fail doctrine? The Swedish case of the early 90s seems to indicate that even if govt intervention is required to save the system, individual banks don't need to be rescued. http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?_r=0

Finally, I am a great fan of your blog and look forward to all of your posts. However, I'm puzzled as to how you could make a post like this on Currency Competition (http://azizonomics.com/2012/08/29/currency-competition/) and not speak out in favor of the Free Banking Austrians.

I'm not saying that we need to immediately switch to a Free Banking system. I merely believe that the insights of the Free Banking school theorists are useful and deserve to be part of the conversation (and certainly part of textbooks on monetary economics and policy). Krugman doesn't seem to be aware that this wing of the Austrian school exists (see here how he believes that all Austrians are anti-fractional reserve banking, even though that's clearly not the case http://krugman.blogs.nytimes.com/2012/09/16/ron-paul-on-money-market-funds/).

This is unfortunate, b/c I feel a much more productive dialog could come about if Krugman engaged people such as Selgin, White, and Horwtiz instead of buffoon-like characters such as Hoppe. Rothbardian positions like anti-frac reserve banking and exclusive reliance on wage-price deflation in response to crises are silly. Why not just acknowledge this and move on to more sensible positions like the Free Banking school? To put it another way: if Rothbardian conclusions are so obviously wrong (in Krugman's and Noah's view), why waste time engaging them?

Aziz: You should try actually reading Krugman before putting words in his mouth. Krugman states that injecting liquidity when interest rates are at zero is not possible. He does not advocate printing money. He advocates increased spending.

Of course, the neoclassicals do the same thing at a higher level of discourse. But instead of feigning ignorance they buttress taboos by using geometrical diagrams that reinforce stale ideas that were proved wrong in the first half of the 19th century (there are other types of formalistic tricks that are used too -- and the ultimate "NO U" response of the neoclassical is "Well show me YOUR model then!"). Be careful in excavating nonsense as you may find a skeleton or two in your own back garden.

Rothbardians such as Hoppe and Salerno have indeed tarnished the reputation of the Austrian school. But there are plenty of others who have produced good work and published outside of Austrian ghettos (White, Horwitz, Kirzner, Boettke, Leeson).

Em, I think you should learn to read and stop letting your emotions get in the way. If I recall correctly I said something like:

"If Austrians accept a dynamic equilibrium interpretation of Austrian Business Cycle Theory then they are just neoclassicals who cannot do maths. And they try to compensate for this by throwing up a mystique around themselves characterised by familiarity with out of date economic texts from the late 19th and early 20th century and hints that they have access to some "wisdom" not possessed by others."

People who read that without ideological blinkers on would see that I'm also implicitly criticising neoclassicals and basically just lumping in Austrians with them -- who they claim to be so divorced from. To me, its all the same and any distinction is political. Although I can appreciate what Noah is saying because the Austrians do tend to attract cranks with a more overt political agenda. The neoclassicals tend to hide their political agenda in algebra and geometrical shapes -- ISLM for the lefties; DSGE with inflation-targeting and/or Ricardian equivalence for the righties.

But then, I'm sure its easier to follow me around the blogs trying to point out supposed "gaps" in my arguments rather than actually discuss the serious methodological issues and fantasy-"theorising" that makes both neoclassical and Austrian economics more like a theological system than a science.

"you should learn to read and stop letting your emotions get in the way."

This is really priceless coming from a guy who threw a (completely unprovoked) hissy fit like this: "This is the rhetoric of the scoundrel and a sophist. And it is for this reason that I am so curt with these people. This argument is over." http://socialdemocracy21stcentury.blogspot.com/2012/12/e-k-hunt-on-equilibrium-prices-in.html?showComment=1355765927349#c906816346671835256

"throwing up a mystique around themselves characterised by familiarity with out of date economic texts from the late 19th and early 20th century"

You mean... like Sraffa and Keynes? Btw, all the books I listed were published after the mid-1980s, and White's work on Scotland was original research. Selgin's Theory of Free Banking (1988) was also new theoretical work (though inspired by Denationalization of Money). How does original research and theory count as 1930s economic hipsterism?

"follow me around the blogs"

Yes, I came here specifically for YOU. Not to read this blog. No, that couldn't possibly be the reason...

fantasy-"theorising"

Canada's laissez-faire banking system had zero failures during the Depression, America under the Fed had 9,000. Please point out the gaps in that.

Despite your charge of "ideological blinkers," I actually am willing to engage different points of view (Debunking Econ makes many good points). It is your ideological prejudice that blinds you to anything besides Post-Keynesianism and leads you to use the epithet of "Neoclassical!" against all other ideas without actually examining them.

Archiving my posts on blogs now? Man... I must have pissed you off something fierce. Ha! (You were engaged in sophistical argument by the way, but I, unlike you, had forgotten about that exchange until you brought it back up...).

If its about point-scoring, then here you go: gold star, John S, gold star. Congratulations. You win, I lose. I can see that this is about ego -- this "exchange" started with you trying to pick holes in mine (yes, everyone except you can see that) -- so I'll let you have it. Arguments on blogs are not personal for me, I'm a bit more mature than that. But if you need it, take it. Sleep well, keyboard warrior.

Yeah, try the "oh, lighten up" line when you don't go around making childish off-topic attacks on people on blogs because they said something that you didn't like/called your BS in another conversation. Otherwise no one is going to buy it.

Life advice: only a kid picks a fight and then says "jeez, lighten up" when they're called out for being an ass. Grow up.

You start this comment with baseless slander ("The whole Austrian school does this"), I point out the ways in which you are wrong, and then you accuse me of being off-topic? I honestly don't understand your thought process here.

But you are correct, I should have not been so flippant with my original comment ("Get your story straight"). I sincerely apologize and will not make that mistake in the future.

[I'm a little late to this, and the comment is going to come off as a personal attack, but it is really is germane to the post, which documents and takes apart argument technique (yes, stylistically, the comment is unusual for the site, but from a substance perspective, it could just as easily be used against people who think Austrians are the bogeyman as those who think Neoclassicists are the bogeyman). To the dear little Pilkington (unless this was some grand hoax on your part to expose how stupid commenters can look making ridiculous arguments), how I appreciate the fruits of your delusions].

This exchange was *amazing*.

I would have thought the Pilkington comments were spoofed if I hadn’t read him before at Naked Cap (which was actually an interesting site for years until the economy turned around and collective rage at the failure of the hoped-for morality play blossomed into epistemic closure).

I’m not sure he realizes how much unrestrained laughter he provokes, but let me just thank him for a moment. His delusional hypocrisy is on the order of a 19th century British novelist’s creation. Reminds me of the Beadle Bumble a little bit, really (with the alliterative initials to boot!).

Now, I don’t know him personally, but unless his writings are some kind of elaborate joke, he’s one of the most extreme examples of insecurity breeding a compensatory façade I’ve ever encountered. The unjustified arrogance! The spectacularly kooky confidence!

He called his opponent a "keyboard warrior." Amazing!!! No wonder he likes Graeber so much.

And this is what makes him a perfect entrant into this thread about argument techniques! What unbiased human could read his “gold star, gold star” comment and not think the writer’s ego had just been bruised? And in a comment where he’s randomly accusing someone else of being trapped by ego!

What unbiased human could read the “Grow up” mandate and not think, “did an eight year old write that comment?” And in a comment where he’s accusing the other debater of being immature!!!! It is *hilarious*. :-) :-) :-)

[And I think he dropped the mic after the “Grow up” comment, took his ball and went home. I mean, seriously, hi-larious!]

And apparently he believes that anyone who remembers the jaw-dropping inanity of his posts and comments is obsessed with him. Oh, dear Pilkington, you may be more annoying than most (and that may make you more memorable), but you are an object of amusement for us, not an object of obsession. To the dictionary, my good man!

In case you think it's mean to beat up on somebody as stupid and dogmatic as triple-H, there's a whole lot of such delicious meanness out there. I keep a small index at my new Critiques Of Libertarianism site....

Minds quite literally, as Bishop Berkeley said, debauched by learning... Let there be no doubt: Encyclopedia Dramatica is the logical end point of marginalist economics... too much repression involved in the latter for the human psyche to contain!

The real issue here, and it's very frightening, is how little it matters how right Krugman has been. This is a triumph of dogma over fact, and history shows us how ugly this can turn out. Krugman is almost the lone (big media) voice defending the fact-based contingent.

Which is the core of why I like Krugman so much. He gets how serious it is when a society ignores facts. If he wanted, he could be a Rogoff or a Woodford and more or less just hide in academia, avoiding the viciousness of the political debate and the lunatic ideology fringe like Mish, Kudlow etc. But Krugman has the guts to put himself out there day after day, and get slammed, death threats, hatred. He's genuinely heroic in standing up for the cause of evidence over ideology.

And society should listen. Because more than anyone else, he's been right about nearly everything for a very long time. A society that ignores people who have proved right and listens to ideological loonies instead does so at its significant peril.

I'm glad to see that the internet has done wonders to spread information and we no longer have to rely on Big Media like the NYT and Big Academia like Yale (*snickers*). Krugman has forecasted very little accurately, actually -- provided we understand forecasting as meaning not just getting very broad events but also understanding the mechanics. He got Japan wrong for years. Reading his stuff on Japan from the 90s, for example, is painful. He criticised the Eurozone in the past, but for the wrong reasons (interest rate homogenisation) and nicked his present criticisms from the MMT crowd without attribution.

Krugman has been good at one thing: fitting dissenting opinons into mainstream (and largely incorrect) frameworks. By the way, bets on how long before Krugman "moves beyond" neoclassical income distribution theory (while keeping the edifice intact), cites something from the Post-Keynesians haphazardly and then all the fanboys drop to their knees in wonder? Hmm... I'm gonna say three years. Anyone want to throw a few buckws into the hat?

I'll bet you a six pack of brews if you're a beer-drinker, Philip. Krugman will never abandon the neoclassical framework. He owes his fame and fortune to working within it. He won't give it up in three years nor in a decade. Perhaps we'll get a deathbed recanting, but that's the most we can hope for.

I actually suspect he knows that mainstream distribution theory is rubbish, but he can't let on too much. Myrdal was the only Nobel-winning economist who was willing to be critical of the mainstream, and he almost didn't accept the award! Of course, we also must keep in mind that Krugman is not well studied in the history of econ compared to some other prominent New Keynesians.

I ran into this over the weekend on a message board thread regarding Estonia. There was someone arguing in favor of Estonian austerity, but he relied on the same weasely tactics. My favorites: "It can be argued that..." followed by an argument that was quickly and easily dismissed; but of course he wasn't the one making that argument. Later: "I'm just asking if maybe..." OK, well, given the limits inherent in macro maybe anything is true.

I do not think you are looking at this the right way. HHH does not think that Krugman is a serious, sober, do-gooding nerd type. He thinks he is a deluded fool who inexplicably possesses uncanny mathematical and rhetorical powers, rather like an idiot savant. He does not want to win by making Krugman mad; he wants to win by making Krugman concede that "Keynesianism and monetarism" (that unholy alliance!) are wrong and that Austrian views are correct. He is not trying to use a gimmick or cheap trick to win a debate, but to convey his belief that the details of Krugman's reasoning are immaterial because they are founded on incorrect premises, and that this can easily be seen on the higher, Austrian plane of reasoning. In short, there is no pretense to HHH's simplicity.

I'm thinking HHH feels that he (or anyone) can win a public argument by forcing Krugman into going into a technical explanation of what to "common sense" is an absurdity, thereby losing the (somewhat ignorant)audience, who will, of course, never be intelligent enough to be able to comprehend Krugman's explanation.

Since this whole approach rests on the assumption that somehow Krugman has been talked into the debate, sometimes, "the only winning move is not to play". A response on Krugman's part similar to "Wow...that question betrays such a fundamental ignorance of economics that I'd be wasting my time even talking to you. I'm not here to teach Economics 101" would be a show-stopper.

Great post Noah. The issue here is that to win the heart of other simpletons, like the ones who take LvM institute seriously, you have to become a simpleton yet sound convincing. HHH is betting that he is better at it than Krugman, but he may be he may be suffering from overconfidence bias. For example:

If printing pieces of paper to use in transactions doesn't make us better off why not give money up and go back to bartering?

"Inserting a "Durr hurr!" at the end of each such example is optional"

Excellent! ha ha

I was thinking as I started reading this, that this "argument method" sounds more like a comedic tool, rather than any serious means of asserting a relevant point.

It reminded me of a guy I interacted with regularly about a decade ago whose preferred method of humour was a greeting including a bizarre complex question. Instead of saying "Hi how ya doin'?" he'd say something like, "Hey, did you ever get that lice problem cleared up?"(Granted, this guy was far more clever & targeted usually, but I can't remember any examples.)

Sounds like this guy in the video is actually advocating sarcasm, often referred to as "the lowest form of humour", as an actual viable argument technique.It's breathtaking!

But it makes sense now why clearly clueless people (ie: people who know far less about economics than I do - and I'm no freakin' expert!) can be found commenting on economic issues, with one-line statements that somehow manage to include a false premise, a contradiction, and a personal insult, all with less than 15 words!

I had no idea there were actually TRAINING VIDEOS for the misinformed to learn how to combine a couple of logical fallacies, plus an ad hominem attack, with a ba-dum-bum targeted comment.

I'm now imagining this video being used to retrain former spam CAPTCHA solvers into the industry of comment thread trolling, in a room where a bank of them get paid $3 per 1,000 anti-social nonsense zinger comments. ha ha ha

It's like trying to argue about the Genesis creation myth with a Evangelical Fundamentalist: you will never convince the fundamentalist that not only isn't Genesis not an accurate depiction of the history of the planet and the cosmos, even they themselves do not regard some aspects of Genesis as literally true. You fooling only yourself if you are trying to communicate new ideas to the fundamentalist, and you are only doing bad things to your own health by trying. They will wear you down with stubborn obtuseness and then declare victory (their faith having been tested) the moment you give up trying to reach them.

I just looked at this paper: "Paul Samuelson's famous 1958 paper on the "social contrivance of money""--it has at least three (3) exclamation marks ("!") in it!!! It's been said that no serious scientific paper has ever been published with an exclamation mark! So is Samuelson's paper the exception to this rule?!

Samuelson's paper is not science, but exploring a theoretical idea using some mathematics. Economics is not science, despite superficial mathematical similarities to physics. There is not a single idea in economics which can be used like a law of physics, without leading to errors and contradictions. Economics is all about arguments (usually citing authorities), without scientific proofs.

You need a citation there - how did you get that the entire profession, in a unitary voice, was calling for austerity? If I remember correctly, the majority of economists were against austerity, with a minority given huge microphones because they were saying what some people wanted to hear and power because some politicians wanted austerity.

Serious question: How does someone like Hermann-Hoppe get a degree in economics? I have a hard time imagining that someone in another branch of science (or, indeed, any comp. lit. student) would dare to use to a tactic like this when debating a highly influential member of their field - certainly not if they actually understood the theories they were trying to mock. Do adherents of Austrian economics get to skip written exams? Or is the general level of ignorance among economists actually high enough to allow such tactics to work?

There are young earth creationists with degrees in evolutionary biology. To get the degree, you just need to prove you can regurgitate the main points of your field and provide satisfactory work in a very narrow topic (your thesis). Believing anything you write or say to get that "worthless piece of paper" is optional.

HHH: "Please explain how a piece of paper can make society richer"PK: "You don't think a piece of paper can make society richer? OK, then I'll just go through your wallet and take all the paper I find there. Surely you won't mind, since it won't make you any less rich, will it?"

To win a debate against someone who is unwilling or unable to understand proper arguments, you may have to resort to anti-heckling techniques as used by stand-up comedians. Not always pretty, but effective.

Seems to me feigning ignorance is a play on the saying: "A man convinced against his will is still of the same opinion." By playing dumb you try to force your opponent to take full responsibility (in this case over policy) while exculpating yourself. Basically, Triple H is acknowledging the existence of criticism about their work without acknowledging the effects of that criticism. There's a reason for that; this is actually a strategy. If austerity fails, naturally, they'll claim Keynesians killed it. But when pressed on post-austerity economic policy, they'll claim skepticism. And if accused of dishonesty, they'll claim incompetence. You don't need a degree in economics to know that "stupid" is less-bad than fraudulent.